Employers Consider Pay and Other Workplace Issues During Power Outages

Here We Go Again!

With a major heat wave and statewide red flag warnings, California employers again face rolling blackouts or protective power interruptions that could shut down businesses throughout the state. Employers often wonder how to pay employees who cannot work when the power goes off, especially employees who have been sent home.

Salaried Employees

Salaried employees must be paid for any day they work at least part of the day and may only lose a day’s pay when they miss an entire 24-hour period for their own reasons. Like other absences beyond their control (such as jury duty), salaried exempt employees receive their pay notwithstanding power interruption.

Hourly Employees

Hourly employees are more complicated. Employers generally do not need to pay hourly employees for time they are not working. But when an hourly employee is sent home early, or called back again after working the same day, employers usually must pay “reporting time” minimums. This often occurs when (1) an employee is sent home involuntarily prior to the end of a regularly scheduled shift (and has not worked at least half the scheduled shift length) or (2) an employee is called back after completing work earlier that day but does not receive at least an additional two hours of work. These requirements are in Section 5 of most employer wage orders (see https://www.dir.ca.gov/iwc/wageorderindustries.htm).

The good news: Employers are not required to apply the reporting time requirements when “utilities fail to supply electricity, water, or gas, or there is a failure in the public utilities, or sewer.” The requirements also exclude situations where “operations cannot commence or continue due to threats to employees or property; or when recommended by civil authorities” – which should also include mandatory fire evacuations and similar public emergencies.

Employer Considerations

Under these rules, employers may send employees home when they cannot continue operations due to power outages. They may also call employees back when power returns.

The same rules should apply to employees who are teleworking. It is possible that some employees, but not others, will be affected by local outages while working remotely during the COVID-19 pandemic.

Employers should also consider any other issues caused by outages, such as whether employees who could technically keep working should continue. For example: state heat regulations and employers' general duty to maintain a safe workplace may require some employees (such as warehouse or packing shed workers) to stop working, or to receive regular rest and recovery periods, when a heat wave knocks out power and causes high temperatures in otherwise cooled workplaces. This and other issues are discussed by Cal-OSHA at https://www.dir.ca.gov/dosh/Protecting-Workers-When-there-are-Power-Outages.html.

Power outages may also impact employers' ability to deal with pandemic precautions, such as operating cleaning equipment and maintaining air circulation/filtration. These and other issues make handling our "new normal" even more difficult in the Golden State.

Judge Requires FFCRA Leave When No Work Available, Voids Broad Healthcare Industry Exception

A judge in the United States Southern District of New York, the federal court in New York City, has issued an order invalidating important parts of the United States Department of Labor (“DOL”) regulations implementing leave under the Families First Coronavirus Response Act.

Most important, the court struck down the “work availability” rule – which confirmed that employees could not take leave when an employer has no work for them – and the regulations’ broad definition of “healthcare provider,” which excludes most employees in the healthcare industry from taking leave. The court’s ruling can be viewed here.

The court first considered whether one of the most important aspects of the law – whether workers must receive leave even when an employer does not have work for them – was treated improperly by the DOL. In a roundabout analysis, the court found that the text of the regulation seems to apply the “work availability” requirement only to three of six qualifying reasons for leave (although the DOL argued it was meant to apply to all reasons for leave, consistent with its opinion throughout guidance materials). It then found that the language of the law itself did not necessarily require that work be available for employees in order for them to take leave. Based on this drafting mistake and its interpretation of the law, the court held that the DOL could not exclude workers for whom an employer has no work from taking paid leave under the law.

The court also considered the regulations’ broad definition of “healthcare provider,” which covers entire workplaces within the healthcare industry. Noting that the definition of health provider under the FMLA typically applies to clinicians, not to the people who work with them (such as administrative employees), the court invalidated the definition as overly broad. It is not clear from the decision what definition would apply following the court’s decision, though it probably would be the Family Medical Leave Act’s general description of “healthcare provider,” which only includes certain professionals such as physicians and psychiatrists (and not other clinical workers such as most nurses and other hospital workers).

Finally, the court invalidated rules requiring employer consent for intermittent leave and advance documentation of the need for leave – items that have not affected employers much, as few employers would deny leave when an employee seems to need it under the new law.

The court’s first conclusion is a bombshell, apparently requiring employers to provide paid leave even when they have laid employees off for lack of work or shut down operations due to a slowdown or local order. The decision could also seriously affect healthcare employers, who have prepared for the continuing pandemic (and the current surge) while relying for months on the Department regulations.

The Department of Labor will certainly appeal and request a stay of the trial court order, which should keep the decision from affecting leave throughout the country – at least immediately. But employers should keep a close eye on developments, and the Department’s coronavirus website (https://www.dol.gov/agencies/whd/pandemic/ffcra-questions), as the pandemic continues.

Shelter at Home Qualifies: Regulations Issued for Emergency Paid Sick Leave and Extended Family Care

The U.S. Department of Labor has adopted initial regulations providing guidance under the Families First Coronavirus Response Act Emergency Paid Sick Leave and Extended Family and Medical Leave benefits. The text of the rules can be viewed here.

Apart from a determination that shelter-at-home orders may qualify employees for benefits, the rules largely follow prior guidance on issues such as leave rights, small employer exemption criteria, benefit calculation, and eligibility. It also contains useful definitions and other important points, such as:

- Most significant (and unexpected): Employees are eligible for Emergency Paid Sick Leave benefits when they must stay home due to a state or local "shelter at home" order, or when certain classes of people (such as those over a certain age) are advised to stay home. (Contrary to most expectations, this qualifies as a "quarantine or isolation order" under the FFCRA despite contrary federal definitions.)

Note: "Essential Businesses" and employers maintaining "Minimum Activities" are likely to argue that their employees are not prevented from working under these regulations, as workers are permitted to travel for such activity, unless an employee falls within a group specifically advised to remain at home.

- (Layoffs not covered): Benefits are not available when an employee has been laid off; a stay-at-home or similar order must "cause the Employee to be unable to work even though his or her Employer has work that the Employee could perform but for the order." Similarly, benefits are not available "where the Employer does not have work for the Employee as a result of the order or other circumstances."

- (Health Care and First Responders): Health Care Providers and Emergency Responders have an expanded definition under the FFCRA, including "anyone employed" at various medical and healthcare related entities. This definition will not apply to other parts of the Family Medical Leave Act.

- (Child Care): Only child care leave can be taken intermittently (in increments agreed with the employer). Leave for other purposes must be taken in whole-day increments until the need for leave is over.

- (Child Care Providers): "Child care provider" need not be a compensated caregiver if it is a friend or family member who regularly cares for an employee's child.

We will continue to review and monitor these regulations, particularly application to state and local government orders. Continuing DOL developments can be viewed at https://www.dol.gov/coronavirus.